NEW YORK – Speaking Tuesday morning at the Sports Betting USA conference, New Jersey Division of Gaming Enforcement Director Dave Rebuck said it was of “critical importance” that states’ leadership be in sync and engaged as they decide how to implement sports betting.
Rebuck’s comments came as part of a panel discussion examining different models and methods that states that plan to implement sports betting – but haven’t yet – might use.
As of now, 13 states offer the activity with six other states and the District of Columbia set to come online in the near future.
From Left, Brendan Bussmann, Jennifer Roberts, David Rebuck, Bill Penders, Bruce Merati / CDC photo by Justin Martin
There are essentially only three models in play when a state starts to consider offering sports wagering, Rebuck said: the partnership model, in which casinos and racetracks partner with providers; the state lottery model, where states run and control the enterprise; and the direct model, which sees the operator working directly with providers.
Bill Penders, a senior adviser with the New Jersey Economic Development Authority, said sports betting has become an “economic engine” for New Jersey. Rather than keeping its viewpoint narrow, the state has also focused on sports technology and eSports.
“We’re focused on the sector as an industry,” he said. “There’s a complete supply chain and ecosystem that goes with the community.”
New Jersey welcomes the competition inherent in the partnership model, as opposed to the state lottery model, Penders said.
“States really aren’t in competition with each other when you focus on the integrity and regulatory development of these new areas,” Rebuck said. “Gambling, though, is extremely competitive… We have to continue to move forward.”
New Jersey is in the process of establishing programs that will lead to the creation of a technology and innovation hub for the industry in the state.
“As long as states (are) willing to look at new forms of wagering, that’s the future,” said Jennifer Roberts, associate director of the UNLV International Center for Gaming Regulation. She cited eSports, mobile, and peer-to-peer as areas that will be “good companions” to traditional sports betting.
“That’s not going away,” she said. “Indiana, Iowa, and New Jersey (saw) brick-and-mortar visitation increase because of sports betting. That element of sports wagering will never go away.”
BC Technologies COO Bruce Merati spoke at length about the need for state regulators to stay vigilant in the face of money laundering and other potential integrity issues, including match fixing and sharp bettors taking more action. He recommended sportsbooks communicate with each other more frequently and advocated for centralized wager-tracking.
“The technology is there to create a database that tracks information around the player,” such as driver’s license numbers, he said.
In response to a question about tax rates on sports betting revenue from moderator Brendan Bussmann, director of government affairs for Global Market Advisors, Rebuck said that New Jersey’s effective tax rate of 20% or less has worked “very well” for the state.
“For other states, it might not work as well,” he said. Pennsylvania, for example, has a 41% inclusive tax rate. States looking to determine a tax rate for their sports betting operations need to examine their true motivations.
“Are you trying to help the industry (bring in) jobs and be a partner in your community, or are you trying to (make) money?” Rebuck asked.
Pennsylvania, he noted, passed gaming legislation long before New Jersey did, and yet New Jersey beat them to the punch on sports betting.
“There is no reason Pennsylvania should be behind New Jersey. They have more people, they have no NCAA restrictions, they have borders with New York, Ohio and Maryland, none of whom have gambling,” Rebuck said. “They have every benefit to be far superior to us (in New Jersey.)”
#exclusive – Sports Betting USA: States offer various different models and methods. -Justin Martin, CDC Gaming Reports. https://t.co/j8FnkwEZaZ @SBUSAConference #CDCgaming
— CDC Gaming Reports (@CDCNewswire) November 6, 2019
Roberts said she thought the Pennsylvania market might be shunned entirely because of the tax rate, pointing to other jurisdictions with high tax rates that don’t share the same level of investment or operations that are found in more “tax-friendly” jurisdictions.
Coincidentally, in an earlier keynote address, New York State Representative J. Gary Pretlow vowed that 2020 would be “the year” for New York’s entry into the mobile sports betting marketplace.
“Time will tell,” Rebuck said.
Justin Martin is the associate editor of CDC Gaming Reports. He can be reached at jmartin@cdcgamingreports.com
